Fiscal Policy Is Weakest and Monetary Policy Is Strongest When

question 48

Multiple Choice

Fiscal policy is weakest and monetary policy is strongest when

• A)we are in the liquidity trap
• B)money demand is very interest elastic
• C)investment is very interest inelastic
• D)we are in the classical case
• E)the IS-curve is very steep and the LM-curve is very flat

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Definitions:

Mixed/Whole Numbers

Numbers consisting of an integer and a fractional part, typically represented as a whole number and a proper fraction.

Percents

A mathematical representation of a fraction of 100, used to describe proportions or rates.

Decimals

Numbers expressed using a decimal system, involving a point to separate the whole number from the fractional part.

Mixed/Whole Numbers

Numbers that consist of both an integer and a fraction part.